Correlation Between SwissCom and XL Axiata
Can any of the company-specific risk be diversified away by investing in both SwissCom and XL Axiata at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SwissCom and XL Axiata into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SwissCom AG and XL Axiata Tbk, you can compare the effects of market volatilities on SwissCom and XL Axiata and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SwissCom with a short position of XL Axiata. Check out your portfolio center. Please also check ongoing floating volatility patterns of SwissCom and XL Axiata.
Diversification Opportunities for SwissCom and XL Axiata
Poor diversification
The 3 months correlation between SwissCom and PTXKY is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding SwissCom AG and XL Axiata Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XL Axiata Tbk and SwissCom is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SwissCom AG are associated (or correlated) with XL Axiata. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XL Axiata Tbk has no effect on the direction of SwissCom i.e., SwissCom and XL Axiata go up and down completely randomly.
Pair Corralation between SwissCom and XL Axiata
Assuming the 90 days horizon SwissCom AG is expected to generate 0.26 times more return on investment than XL Axiata. However, SwissCom AG is 3.84 times less risky than XL Axiata. It trades about -0.23 of its potential returns per unit of risk. XL Axiata Tbk is currently generating about -0.09 per unit of risk. If you would invest 6,137 in SwissCom AG on September 1, 2024 and sell it today you would lose (366.00) from holding SwissCom AG or give up 5.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
SwissCom AG vs. XL Axiata Tbk
Performance |
| Timeline |
| SwissCom AG |
| XL Axiata Tbk |
SwissCom and XL Axiata Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SwissCom and XL Axiata
The main advantage of trading using opposite SwissCom and XL Axiata positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SwissCom position performs unexpectedly, XL Axiata can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in XL Axiata will offset losses from the drop in XL Axiata's long position.| SwissCom vs. Telecom Argentina SA | SwissCom vs. Rogers Communications | SwissCom vs. Magyar Telekom Plc | SwissCom vs. Hellenic Telecommunications Org |
| XL Axiata vs. MTN Group Ltd | XL Axiata vs. Vodacom Group Ltd | XL Axiata vs. Telenor ASA ADR | XL Axiata vs. KT Corporation |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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